UP govt to go ahead with power privatisation plan

Despite employees’ protests, the govt remains firm on its decision, as it is of the opinion that privatisation will improve efficiency and service delivery in the power sector: Official

LUCKNOW Undeterred by the ongoing protests by employees, the UP government has decided to proceed with the privatisation of two state-owned power distribution companies (discoms) covering over 40 districts, said officials.

The order outlines key actions, including the appointment of a transaction advisor, with related expenditures and proceedings to be handled by UPPCL. (Pic for representation)

“Following chief minister Yogi Adityanath’s approval, we issued a GO mandating the UP Power Corporation Ltd (UPPCL) to go ahead with its proposal for privatising power distribution in the state,” an energy department official.

“Despite employees’ protests and concerns, the government remains firm on its decision, as it is of the opinion that privatisation will improve efficiency and service delivery in the power sector besides ridding the sector of losses,” another official said.

The government, in an order issued on December 30, had directed the corporation to take necessary steps to implement the plan. The GO, however, was not brought into public domain.

The order was issued in reference to the UPPCL chairman’s letters no. 282/PESPCL/2024 dated December 3, 2024, no. 283/PESPCL/2024 dated December 4, 2024, and letter no. 317/PESPCL/2024 dated December 18, 2024.

“After detailed deliberations in the Energy Task Force meeting on the proposals submitted by UPPCL regarding comprehensive reforms in electricity distribution companies - Purvanchal (PUVVNL) and Dakshinanchal (DVVNL), it is hereby directed that regarding the privatisation/ public-private partnership of electricity distribution companies, please ensure to take the following actions as per the draft SOP issued by the ministry of power, Government of India,” the GO stated.

The order outlines key actions, including the appointment of a transaction advisor, with related expenditures and proceedings to be handled by UPPCL. The terms of reference (TOR) and timeframe for the advisor will be finalised in consultation with the finance department through the Energy Task Force (ETF).

The transaction advisor will be responsible for presenting a comprehensive action plan addressing key aspects of privatization and the PPP model. Additionally, a nodal officer will be appointed at the UPPCL level to oversee and follow up on the entire bidding process.

Notably, the UPPCL has already floated a request for proposal (RFP) to select a transaction advisor/consultant through a competitive bidding process amid statewide protests by power employees/engineers who are demanding cancellation of the process launched to select the consultant.